Monday, September 28, 2015

A passive and fixed mindset?

“DTI cuts exports growth forecast to single digit,” Catherine Pillas, Business Mirror, 17th Sept 2015. “The Department of Trade and Industry (DTI) has also abandoned the government goal of growing merchandise exports by twin digits this year, as demand from China and other top export markets continues to diminish.”

“We just have to live with it for the time being because our main market is really China. The US is good, but China’s really bad,” Export Marketing Bureau Director Senen M. Perlada told reporters . . . The National Economic and Development Authority had also declared that the government target of 10-percent growth in export receipts this year will no longer be achieved . . . The rise in exports to the US and the European Union has not been enough to offset China’s diminishing demand, while the impact of the peso depreciation is negligible, the DTI director said.

“[E]ven if electronics exports—the country’s major manufactured export segment—have grown . . . this is being offset by the slowdown in agricultural products . . . Banana, pineapple, mango and other processed foods that use these as raw materials are down because of the drought . . . Agro-based products . . . dropped by 24.5 percent . . .”

Ergo: We’re not in the driver’s seat as far as industry and exports are concerned – because industrialization in the Philippines is decades behind. We export intermediate goods if not basic raw materials. And the more we fall behind in industrialization the more we will fall behind in investment, technology, innovation as well as people, product, supply chain and market development. They are the building blocks of an ecosystem that we can't afford to ignore!

Silicon Valley is well developed; it is an ecosystem in and of itself – starting from investment all the way to market development, the Apple Store and iTunes being concrete examples and where buyers and Apple come together. And this continuing direct engagement edifies and equips Apple to develop products that consumers cherish. The evidence? They would camp out of an Apple Store the night before a new Apple product is launched.

“The company announced Monday that it is ‘on pace’ to beat last year's opening weekend sales record of 10 million units sold . . . ‘We are on pace to beat last year's 10 million unit first-weekend record when the new iPhones go on sale September 25,’ a spokesperson for Apple said in a statement to Mashable. ‘As many customers noticed, the online demand for iPhone 6s Plus has been exceptionally strong and exceeded our own forecasts for the preorder period. We are working to catch up as quickly as we can.’” []

But Apple is in the private sector – and what about the public sector? “The two Mexicos: With its combination of modernity and poverty, Mexico provides lessons for all emerging markets,” The Economist, 19th Sept 2015. “The first lesson, and easiest to learn, is the centrality of urbanization. Cities offer people opportunities to prosper that cannot be found in the countryside: about 120,000 people in Asia are migrating to cities every day, for example. But unless cities provide transport, power, sanitation and security, they will fail to fulfil their economic potential. Violent, drug-related crime stalks Mexico’s scruffy barrios, where city-dwellers live. In South Africa the lack of public transport obliges slum-dwellers to take expensive minibus-taxis to work. Cities in Pakistan and the Philippines are plagued by blackouts. Slums ought to be every modernizer’s priority. They are where most people live, and where jobs, schools and technology are closest to hand.

“The second is the importance of infrastructure, and not just in the cities. Many of the foundations of the modern Mexican economy were laid a century ago, in the form of roads and railways tying its industrial heartland to its ports and the northern border. That leaves swathes of the country unconnected. Centralization breeds anomalies: beach resorts often buy their seafood in Mexico City’s wholesale market, hundreds of miles from the coast. Yet linking up parts of a country is not easy. It takes both investors willing to bear risk and also politicians prepared to take on the status quo. In India, for example, plans for big infrastructure projects have been frustrated by squabbles over land and a dearth of long-term financing.”

“ENDING EXTREME POVERTY IN THE PHILIPPINES THROUGH URBAN-LED GROWTH,” Gloria Steele, John Avila, Daniel Miller and Gerald Britan,“In the Philippines — and quite possibly in many other rapidly developing countries — urban-led development focused on second-tier cities as engines of growth promises to be an effective approach for addressing poverty and the inequitable distribution of income.”

“A development paradigm focusing on cities as engines of growth. USAID’s mission in the Philippines believes that the development of more competitive second tier cities can drive inclusive growth that improves the welfare of both urban populations and people living in surrounding peri-urban and rural areas. As a recent white paper on urbanization noted, ‘cities can be engines of economic growth’ and ‘urban growth, in turn, drives rural development.’

“This approach is grounded in data that report higher growth in economic output in several increasingly urbanizing Asian countries. In these countries, the development of secondary cities effectively stimulated surrounding rural development. For example, from 1970 to 2006, China and India each produced an average 6 percent increase in per capita GDP for every 1 percent increase in urban population. Vietnam and Thailand exhibited 8 percent and 10 percent increases, respectively.

“Cities in the Philippines, however, have not generated the same high rates of economic growth or reductions in poverty that were realized in China, India, Vietnam and Thailand. This has been attributed to the nation’s archipelagic geography, highly fragmented structures for spatial and infrastructure planning and poor metropolitan governance.”

Still, industrialization cannot be taken for granted. Without the benefit of large-scale enterprises, say, Thailand’s auto industry, the role of second-tier cities would not be as robust. Another example would be Nestlé. The ecosystem of Nestlé covers from coffee farming to their mind-boggling range of products one would find in mom & pop’s, convenience stores, groceries, supermarkets and hypermarkets, even online stores like Amazon and all the way to boutique cafes serving premium Nespresso coffee brewed from Nespresso pod machines that one could purchase for home use.

Our inability to embrace and champion the efforts behind the 7 industry winners teed up by the JFC speaks volumes: we’re nowhere near approaching an industrialized economy. Not surprisingly, we continue to rely on OFW remittances. And while the BPO industry is a welcome addition, the multiplier effect of industry is something we sorely miss. Another imperative we can’t ignore – and why we aren’t an inclusive economy!

But what about our SMEs that make up 99% of industry? They make Pareto a reality that we continue to overlook! Their share of PHL’s economic output would continue to be miniscule until we learn to transcend size and influence. And AEC can’t do that for us. It can only come to fruition if we learn to value technology and innovation over and above hierarchy, political patronage and oligarchy. And to not assume Pangilinan and Pacquiao can bring home the bacon, even of the sports kind.

More to the point, we have to pull together a robust large-scale strategic industry base and SMEs. That is, to connect the dots: from freedom and democracy to the rule of law to free enterprise but not the unfettered kind – as in Japan Inc. or China Inc. or Singapore Inc. And be geared to continually develop, innovate and respond to lifestyle and productivity needs of people. In the final analysis, to market competitive products and services.

Our mindset – passive and fixed as it were – must be shaped to imagine that a college dropout tinkering with gadgets in his parent’s garage could become the world’s largest enterprise! SMEs mustn’t just be destined to be small family-owned businesses. But that demands a worldview that isn’t restricted and confined – by a parochial, inward-looking bias. Perseverance in pursuing development outside our comfort zone – custom and tradition – is a must.

“Even the boldest reformer could not rapidly resolve all of these problems. This is the less cheering message of the two Mexicos: for all but a handful of countries, the road to prosperity is hard and long. But Mexico’s successes also demonstrate that it does exist. Even if the gains must be measured in decades, perseverance eventually brings rewards.” [The Economist, op. cit.]

Thursday, September 24, 2015

“An eye for an eye, a tooth for a tooth”

Déjà vu – from Biblical times? Congress hurtled toward a government shutdown on Tuesday, with Republicans threatening to block a budget deal if it includes financing for Planned Parenthood, as President Obama prepared to join the fight by pushing Republicans to scrap a multibillion-dollar tax advantage for private equity managers.” [With Possible Shutdown Nearing, Obama Looks to Take Budget Fight to G.O.P., David M. Herszenhorn and Julie Hirschfeld Davis, The New York Times, 16th Sept 2015]

If America appears to have lost its bearings [even worse if one goes by how a major US daily saw the last debate, i.e., “crazy talk at the Republican debate,” and piled on my countless readers], surprisingly, the Russians would still entertain a sense of persecution? “Anti-Americanism is more potent now because it is stirred up and in many ways sponsored by the state, an effort that Russians, despite their hard-bitten cynicism, seem surprisingly susceptible to. Independent voices are all but gone from Russian television, and most channels now march to the same, slickly produced beat. Virtually any domestic problem, from the ruble’s decline to pensioners’ losing subsidies on public transport, is cast as a geopolitical standoff between Russia and America, and political unrest anywhere is portrayed as having an American State Department official lurking behind it.” [Why Russians Hate America. Again, Sabrina Tavernise, The New York Times, 12th Sept 2015]

“‘America wants to destroy us, humiliate us, take our natural resources,’ said Lev Gudkov, director of Levada, the polling center, describing the rhetoric, with which he strongly disagrees. ‘But why? For what? There is no explanation.’ DURING my visit, Russians were thinking about America a lot, which was a kind of compliment, but in the way of a spurned lover who keeps sending angry texts long after the breakup.

“Intellectuals pointed me to books on Berlin in the 1920s and the concept of ‘ressentiment,’ a philosophical term that describes a simmering resentment and sense of victimization arising out of envy of a perceived enemy. It often has its roots in a culture’s feeling of impotence. In Berlin in the early 20th century, it helped explain the rise of German fascism. In Russia in August, it seemed to have many targets: Ukraine, gay people, European dairy products and above all the United States.

“Others believe that the government is unraveling, and that the shrillness of the nationalist narrative is a harbinger. Oil prices have plunged, shrinking the pie that Mr. Putin’s loyalists had been feasting on. ‘It’s like before Pompeii, when all the springs dried up,’ said one Russian friend, a former journalist who is a keen observer of the political system. ‘The ground is hot.’ The low opinion of America, Mr. Gudkov said, is not a permanent condition. The resentment seems to have more to do with Russians themselves than with any American action, a kind of defensive, free-floating expression of current anxieties.”

“But Russia stood for something that America has never been known for: depth of soul. If America radiated a certain vision of happiness onto the world, Russian heroes radiated a vision of total spiritual commitment.” [The Russia I Miss, David Brooks, The New York Times, 11th Sept 2015]

“‘The Russian attitude,’ Isaiah Berlin wrote, ‘is that man is one and cannot be divided.’ You can’t divide your life into compartments, hedge your bets and live with prudent half-measures. If you are a musician, writer, soldier or priest, integrity means throwing your whole personality into your calling in its purest form.

“The Russian ethos was not bourgeois, economically minded and pragmatic. There were radicals who believed that everything should be seen in materialistic terms. But this was a reaction to the dominant national tendency, which saw problems as primarily spiritual rather than practical, and put matters of the soul at center stage.

“While the rest of the world was going through industrialization and commercialism and embracing the whole bourgeois style of life, there was this counterculture of intense Russian writers, musicians, dancers — romantics who offered a different vocabulary, a different way of thinking and living inside.

“And now it’s gone . . . Russia is a more normal country than it used to be and a better place to live, at least for the young. But when you think of Russia’s cultural impact on the world today, you think of Putin and the oligarchs. Now the country stands for grasping power and ill-gotten money.”

What happened to these once two superpowers? Or does it go beyond them? “Signs of democratic dysfunction are everywhere, from Athens to Ankara, Brussels to Brasília. In the United States, the federal government has shut down 12 times in the last 35 years. According to the political scientists Christopher Hare and Keith T. Poole, the two main American political parties are more polarized now than they have been at any time since the Civil War.” [Across the Globe, a Growing Disillusionment With Democracy, Roberto Foa and Yascha Mounk, The New York Times, 15th Sept 2015]

“Some citizens of democracies have become so unhappy with their institutions that . . . they may be tempted to dispense with partisan politics altogether. Would it not be better to let the president make decisions without having to worry about Congress — or to entrust key decisions to unelected experts like the Federal Reserve and the Pentagon?

“Institutional change, however, is only the first step toward the real goal: redistributive policies that improve the standard of living of citizens . . . The future of democracy is uncertain. In the West, democratic systems have proved strong enough to weather the disappointments of the last decades. It’s perfectly possible that they can weather more. But to put off serious change because it is so easy to assume that democracy is here to stay is to put at risk the very stability of democratic government.”

And it gets more complex as one looks at Europe. Most of the countries that were liberated from the Soviet yoke 25 years ago are still poorer than their neighbors and have not shed a sense of victimhood; many have never had large numbers of people from distant parts of the world on their lands; and many have only a limited familiarity with the crises of the Middle East.” [Eastern Europe’s Short Memory, The Editorial Board, The New York Times, 15th Sept 2015]

“All these things, however, are beside the point. The question before Europe’s national leaders is not whether they should welcome immigrants but how to cope with a massive and fateful rush that has put an inordinate burden on the European countries where refugees first arrive: Greece, Italy and Hungary.

“Hungary’s prime minister, Viktor Orban, has been among the most vocal in blocking any joint action, but he is not alone. He has argued that Germany is largely responsible for the mass migration because of its prosperity, generous asylum policies and — until this weekend — open borders, and he has made the specious argument that as a Christian country, Hungary should not be made to take in a lot of Muslims. Leaders of Slovakia, the Czech Republic, Poland, Romania and the Baltic States have all advanced similar arguments.

“These developments should be especially worrisome to the Eastern Europeans. Their inability to travel freely was an agonizing aspect of their decades under Communist dictatorship, and the generous welcome they received when they rejoined the ranks of Western liberal democracies was a great triumph for all of Europe. It would be a tragedy if those same eastern countries now contributed to the unraveling of European unity, just when it is so desperately needed.”

“This creative tension seems to show itself as a necessary staging that we all have to go through. It is amazing to see that the three classic divisions of the Hebrew Scriptures (Law, Prophets, Wisdom) also parallel the normal development of spiritual consciousness and even human growth, which I will call (1) order, (2) criticism and (3) integration.” [Things hidden: scripture as spirituality, Richard Rohr, Franciscan Media, 2007, pp. 72-73]

In other words, this is the 21st century but the world is yet to move beyond the first level of human consciousness – confined to the narrow boundaries of law – and the level of criticism and conflict. Probably the Dalai Lama and Pope Francis are among the very few that have reached the third level, that of wisdom.

Sunday, September 20, 2015

Off-the-cuff or profound?

“Much of the Pope’s off-the-cuff remarks came in response to the stories shared by young people present at the event . . . Pope Francis concluded with a call for the young people to ‘go against the current’ and follow the path of Christ, not being afraid to dream big and ‘make a mess’ . . . ‘Keep making noise,’ he said.” [Pope Francis off-the-cuff to young people: Don't waste your lives, Asunción, Paraguay, Catholic News Agency, 12th Jul 2015]

“Pope Francis said on Friday we must learn to not judge others or we all risk becoming hypocrites including the Pope himself. At the same time, he said, we need to have the courage to acknowledge our own faults in order to become merciful towards others. The Pope’s comments came during his homily on Friday (11th September) at the morning Mass in the Santa Marta residence.” [Pope Francis: We all, including me, risk becoming hypocrites, Vatican Radio, The Manila Times, 12th Sept 2015]

“Pope Francis’s homily was a reflection taken from St Paul’s teaching on mercy, forgiveness and the need to avoid judging others. He said the Lord speaks to us about the reward contained within this: Do not judge and you will not be judged. Do not condemn and you will not be condemned.

“The Holy Father began by reflecting on the first reading from St. Paul’s 1st Letter to Timothy, in which the apostle praises God’s mercy on him despite his sins . . . ‘I am grateful to him who has strengthened me, Christ Jesus our Lord, because He considered me trustworthy in appointing me to the ministry. I was once a blasphemer and a persecutor and an arrogant man, but I have been mercifully treated because I acted out of ignorance in my unbelief,’ St. Paul says.

“Commenting on the beauty of Paul’s words, the Holy Father explained that the first step in obtaining such humility is to accuse one’s self . . . ‘The courage to accuse yourself, before accusing the others,’ he said. ‘And Paul praises the Lord because He chose him and gives thanks ‘because He considered me trustworthy in appointing me to the ministry. I was once a blasphemer and a persecutor and a violent man’. But there was mercy.”

“That is why Jesus criticizes hypocrisy more than anything else. He does not hate sinners at all, but only people who pretend they are not sinners . . . Archaic religion and most of history of religion has almost always seen the shadow as the problem. What religion is about is getting rid of the shadow . . . This is the classic example of dealing with the symptom instead of the cause.” [Things hidden: scripture as spirituality, Richard Rohr, Franciscan Media, 2007, pp. 76-78]

“‘Take the plank out of your own eye, and then you will see clearly enough to take the splinter out of your brother’s eye.’ He does not deny that we should deal with evil, but you better do your own housecleaning first – in a most radical way . . . If we do not see our own ‘plank,’ it is inevitable that we will hate it elsewhere. 

“Jesus is not too interested in moral purity because he knows that any preoccupation with repressing the shadow does not lead us into personal transformation, empathy, compassion or patience, but invariably into one of two certain paths: denial or disguise, repression or hypocrisy. Isn’t that rather evident? Immature religion creates a high degree of ‘cognitively rigid’ people or very hateful and attacking people – and often both. It is almost our public image today, yet God’s goal is exactly the opposite.

“. . . Jesus is addressing the radical cause of evil and not the mere symptoms. As John the Baptist says of Jesus’ work, he ‘lays his axe to the root (radix) of the tree’ (Mathews 3:10). Most of us just keep trimming the branches and wonder why the same faults keep re-growing out of the trunk.”

“This creative tension seems to show itself as a necessary staging that we all have to go through. It is amazing to see that the three classic divisions of the Hebrew Scriptures (Law, Prophets, Wisdom) also parallel the normal development of spiritual consciousness and even human growth, which I will call (1) order, (2) criticism and (3) integration.” [Rohr, pp. 72-73]

“Clearly the easiest way to start, and the way that most people in history have, in fact, started, is with tradition, custom, law and order: ‘This is the way we do it.’ We see that taught very clearly early in the Bible, and would be the best way to start. Torah, or Law, provides ego structure, identity, exclusivity, boundaries, loyalty and necessary discipline to counter the imperial ego.

“Now if you think that is rebellious talk, it probably means you have not studied much of the second section of the Hebrew Scriptures, the Prophets or the birth of criticism. Without doubt, the prophetic canon has had the least influence on Catholic and Protestant theology, largely because we only read them insofar as they are offered as proof of texts for the coming of the Messiah. Yet they take up far too much room in the Bible just to be saying that.

“What we do see in the prophetic books is the clear emergence of critical consciousness and interior struggle in Israel . . . They have to leave their false innocence and naïve superiority behind and admit that they do not always live what they say they do at the level of ‘law’ or inside their idealized self-image.”

Does the exposition remind us of Padre Damaso? What about our own Philippine tradition and custom? For example, how do we define patriotism? For decades we assumed that to allow foreign direct investment was unpatriotic? Until we woke up one day and realized our neighbors have left us behind? That the road to authentic patriotism is to be questioning of one’s self – ourselves – and of our man-made laws and culture, including that of impunity, against the imperative of the rule of law? 

“Nothing can erase the horrors of World War II and the Holocaust. But modern Germany is the most powerful example of the idea that people can change, cultures can change, and that over time, redemption is possible, even for a nation soaked in blood.” [Germany’s road to redemption, Fareed Zakaria, Washington Post Writers Group, The Manila Times, 12th Sept 2015]

“. . . [W]e must be honest and admit that the only Absolute that the Bible ever promised us is Yahweh, and in relationship to Yahweh all else is indeed relative. No institution, not Israel itself, no priesthood, no kingship, no military might, no conceptual school of thought and no legal system was ever allowed to displace Yahweh as the ‘rock and solid fortress’ of Israel (Psalm 71). . . Although each one of them tried, and often did, replace Yahweh as the Central Reference Point, it is always called ‘idolatry’ by the prophets.” [Rohr, op. cit.]

“‘And Jesus uses that word that he only uses with those who are two-faced, with two minds: ‘Hypocrites! Hypocrite. Men and women who can’t learn how to acknowledge their own faults become hypocrites. All of them? All of them: starting from the Pope downwards: all of them. If a person isn’t able to acknowledge his or her faults and then says, if it’s necessary, who we should be telling things about other people, that person is not a Christian, is not part of this very beautiful work of reconciliation, peace-making, tenderness, goodness, forgiveness, generosity and mercy that Jesus Christ brought to us.” [Vatican Radio, op.cit.]

Off-the-cuff or profound, even theological, from Francis? “Who am I to judge?” [This posting was inspired by the visit of Pope Francis to the US; 22 – 27 Sept 2015.]

A Gift to New York, in Time for the Pope,” Larry Buchanan, David W. Dunlap and Josh Williams, The New York Times, 17th Sept 2015.Pope Francis, the fourth pontiff to visit St. Patrick’s Cathedral, will find it brighter, cleaner and in better repair than it has been for decades.”

“Archbishop John Hughes commissioned the cathedral from James Renwick Jr., the architect whose six-foot-high drawing of the west facade dates to 1853. Pope Francis’ pending visit prompted a quick wrap-up of the . . . restoration project. The cathedral was a masterpiece from the start . . . But the masterpiece had aged. The facade had absorbed so much soot, grime and pollution that the white marble was indistinguishable from the gray granite . . . An inspection of the facade by Building Conservation Associates, a preservation consulting firm, identified about 18,000 areas needing repair . . . But the impetus for finishing the job ahead of the December deadline can be summarized in two words: The pope.”

Saturday, September 12, 2015

Analysis and leadership

Merriam-Webster: Analysis – a careful study of something to learn about its parts, what they do, and how they are related to each other; an explanation of the nature and meaning of something. Leadership – a position as a leader of a group, organization, etc.; the power or ability to lead other people.

President Aquino’s presidency is being analyzed by all and sundry as we begin the process of choosing and electing the next president. And by definition the performance of the economy comes with that. And so are the perceived strengths and weaknesses of Binay or Roxas, for example. The reality is analysis and leadership are two different construct. And candidates with executive or managerial experience [e.g., Binay for being a mayor of Makati] including in the US are deemed to be better equipped for the very demanding leadership position of president.

Two Nobel Prize winners would come to mind if one would dissect the limits of analysis. Is the converse then the looming inevitability of Binay? And Binay, of course, can promise anything including free birthday cakes and movies to seniors, among others. But what is reality for the Philippines and its economy? We badly need a president committed to nation building, beyond self and family. [Beyond the Marcos family and the Binay family.] Sadly, we’re between a rock and a hard place!

“Can you devise surefire ways to beat the markets? The rocket scientists thought they could. Boy, were they ever wrong.” [FAILED WIZARDS OF WALL STREET, Peter Coy and Suzanne Woolley, with Leah Nathans Spiro and William Glasgall in New York and bureau reports, Business Week, 21 Sept 1998]

“Smart people aren't supposed to get into this kind of a mess. With two Nobel Prize winners among its partners, Long-Term Capital Management L.P. was considered too clever to get caught in a market downdraft. The Greenwich (Conn.) hedge fund nearly tripled the money of its wealthy investors between its inception in March, 1994, and the end of 1997. Its sophisticated arbitrage strategy was avowedly ‘market-neutral’--designed to make money whether prices were rising or falling. Indeed, until last spring its net asset value never fell more than 3% in a single month.

“Then came the guns of August. Long-Term Capital's rocket science exploded on the launchpad. Its portfolio's value fell 44%, giving it a year-to-date decline of 52%. That's a loss of almost $2 billion. ‘August has been very painful for all of us,’ Chief Executive John W. Meriwether, a legendary bond trader, said in a letter to investors.”

Since there is no guarantee that an analysis despite its thoroughness and insights like a dissertation will in fact hold water, leading institutions in the West are pushing for the commercialization of certain dissertations. The reality being countless of them won’t ever see the light of day. And commercialization presupposes accountability.

In the case of economic managers, they are not mere analysts, they are managers; they are leaders. And they are accountable to Juan de la Cruz. And it doesn’t mean being patronizing and condescending. Sadly, in our hierarchical system and structure, they are licensed – to the detriment of Juan de la Cruz. For instance, instead of acknowledging the crisis proportion the traffic situation in the metropolis has reached, at least two people from the administration invoked “improving auto sales.” Even when that’s part but not the crux of the matter!

“Metro ‘traffic dream’ to take 15 years, cost $65 B – study,” Christina Mendez, The Philippine Star, 7th Sept 2015. “It could take another 15 years and $65.3 billion worth of investments to solve the horrendous traffic in Metro Manila, according to the National Economic and Development Authority (NEDA).”

“This was contained in a NEDA study conducted with technical assistance from the Japan International Cooperation Agency (JICA), which recommended a roadmap for the implementation of a comprehensive Dream Plan by 2030 for Metro Manila and mega Manila to address the growing population and demand for better transport in the National Capital Region.

“‘If nothing is done, the situation in 2030 will become a nightmare. All roads will be saturated. Negative impact on economic, social and environmental aspects will be so large, deterring the function and livability of Metro Manila,’ the report added.

“The same report showed the transport cost of road users, including vehicle operating cost and time cost, is pegged at P2.4 billion a day in Metro Manila. The amount will increase to P6 billion day by 2030 if the government and the private sector will not act on the problems today.

“If no interventions are made, the study showed the average low-income households will have to spend no less than 20 percent of their monthly household income for transport. If Metro Manila’s current transport system is not improved, roads and railways will be insufficient in solving traffic congestion, the report said.”

Did we hear something similar before with NAIA 3? And do we stew our problems in chunks of decades? And the consequence? We’re missing the aggressive tourism numbers despite frenetic efforts in building roads to major tourist attractions. And everyone knows the answer: we don’t have the infrastructure to drive a systemic, sustainable and competitive industry – including one where we have the natural beauty that we can leverage!

If we put that scenario side-by-side with rural poverty and our consistent cry for farm-to-market roads, do we think we can alleviate rural poverty when we don’t have the infrastructure and, much less, the ecosystem to drive a systemic, sustainable and competitive agribusiness – that connects the dots? If we expect agribusiness to be a pillar of the economy, we need beyond infrastructure the commitment to investment, technology, innovation as well as people, product, supply chain and market development.

Take coconut. A major proportion of our farmers are dependent on coconut yet we don’t have the ecosystem of a technology- and innovation-driven coconut-based industry, for instance. We didn’t purposely design it to be systemic, sustainable and competitive – i.e., for the common good. Political patronage would always trump all!

And back to infrastructure. ‘Focus on infrastructure to step up growth’ – IMF URGES THE PHILIPPINES, Mayvelin U. Caraballo, 6th Sept 2015. “The International Monetary Fund (IMF) said the Philippines must focus on improving public infrastructure to attract investment if it seriously seeks to step up economic growth and cut poverty more significantly. The Philippines has been lagging its Asian peers in investment due to poor infrastructure, which has been traced to government underspending on such projects.

“Benchmarking the Philippines relative to its neighbors in terms of the size of public investment and capital stock; the quality of public infrastructure; and public investment efficiency, the IMF confirms in a country report that the level of public capital and the quality of public infrastructure in the country are low, and that there is room for improvement in public investment efficiency.

“‘At 21.8 percent of GDP [gross domestic product] in 2014, the investment rate in the Philippines is well below regional peers, as reflected in its low capital stock and infrastructure quality’ . . . The report added that model simulations suggest that improving public infrastructure would result in a sustained output increase and leads to permanent gains in productivity, which crowds in private investment.

“In the report, the IMF said it measured public investment and the stock of public capital for a large sample of countries, finding that the Philippines consistently had lower public investment than other members of the Association of Southeast Asian Nations (Asean) in the recent past, averaging 2.5 percent of GDP in 2000 to 2014.

“As a result, the public capital stock is also one of the lowest among Asean countries, at about 35 percent of GDP in 2013, compared with the regional average of 72 percent of GDP.”

Does Juan de la Cruz see that we’re the regional laggard? We can’t be in denial . . . on top of our dearth of leadership committed – beyond self and family – to community and the common good? That’s a double whammy – a formula for disaster!

Monday, September 7, 2015

“Think big, execute ideas”

“‘Think big. Regional expansion is key for Southeast Asia,’ John Fitzpatrick [of Amazon Web Services] said. ‘It’s the execution that counts. Having ideas means nothing if you don’t go out and do something about them.’ Fitzpatrick also underscored the importance of having the right attitude in facing roadblocks. ‘You have to like winning. Attitude determines outcome,’ he said. ‘You got to be resilient because that’s what separate winners from the rest.’” [Young tech entrepreneurs told: Think big, don’t worship Silicon Valley, Yuji Vincent Gonzales,, 21st Aug 2015]

“‘A lot of those who jumped into our radar fastest were seen outside the Philippines. If I see you actively engaging other markets even if you are not there yet, even if you are just testing your market, talking to people outside and actively engaging with investors, then that tells me, this person is taking beyond the Philippines,’ [Golden Gate Ventures principal] Justin Hall said.

“[He] added that foreign investors like him had been looking for startups with ‘aggressiveness’ and ambition to expand. ‘We’d like to invest in very aggressive founders. If you are in Southeast Asia, you got to expand to other markets. There needs to be a rollout. That’s a trait that we are still trying to find in Southeast Asia,’ he said.” [PH, Southeast Asia ‘bright spot’ for tech investments, but …, Yuji Vincent Gonzales,, 21st Aug 2015]
Where are we in gearing up to meet the challenge of AEC?

“[Former Director General of the National Economic and Development Authority (NEDA), and head of USAID’s Trade-Related Assistance for Development (TRADE) Project] Dr. Cielito Habito stressed that the key instrument for inclusive growth is empowering and developing SMEs through government-wide coordinated support to expand financing options, increase access to technology, and improve market access.”[Enabled PH enterprises key to inclusive growth, Manila Bulletin, 28th Aug 2015]

“Habito explained that SMEs, for their part, should strengthen and professionalize their financial and overall business management, and be prepared to cluster with other competitors when volume orders especially from overseas calls for it. He also said it is important for SMEs to study and utilize government programs designed to . . . help them gear up for competition under the AEC. He went on to explain that the Philippines’ trade with other member countries in ASEAN is mostly in products in different stages of the value chain in the same industries, especially electronics, vehicles and chemicals. ‘This makes our TRADE with ASEAN more complementary rather than competitive in nature, and trade protectionism can be self-penalizing in this context,’ he asserted.”

What is our frame of mind or our mindset? This blog has discussed the difference between a “fixed mindset” and a “growth mindset.” If we are to be a successful or a leadership economy – and not the regional laggard – we have to learn and embrace what that entails. Social scientists call them the 3 Cs: commitment, challenge and control. It means we must commit to the imperatives of a highly globalized and competitive 21st century and overcome our inward-looking parochial instincts otherwise AEC will pass us by. We can't be in that old paradigm that AEC is another OFW land. That is suboptimal, if not worse, the inability to lift ourselves from underdevelopment.

Economic blocs are not for the faint of heart as the Greeks now know. We have to step up to the challenge of AEC and demonstrate that we are in control. We can’t expect the rest of the AEC, if not the world, to defer to us. The change must come from us, which is what social scientists mean by control, not our oligarchic definition of control. As a noted physicist said, we can’t fall into “arrogance of success.” At home we may be the elite and successful. Yet being the regional laggard in this day and age that is not relevant – given our underdevelopment and the persistent poverty confronting us.

Before we can think big, should we in fact figure out what it means?

“The Case for Teaching Ignorance,” Jamie Holmes, The New York Times, 24th Aug 2015. “IN the mid-1980s, a University of Arizona surgery professor, Marlys H. Witte, proposed teaching a class entitled ‘Introduction to Medical and Other Ignorance.’ Her idea was not well received; at one foundation, an official told her he would rather resign than support a class on ignorance.”

“Dr. Witte was urged to alter the name of the course, but she wouldn’t budge. Far too often, she believed, teachers fail to emphasize how much about a given topic is unknown. ‘Textbooks spend 8 to 10 pages on pancreatic cancer,’ she said some years later, ‘without ever telling the student that we just don’t know very much about it.’ She wanted her students to recognize the limits of knowledge and to appreciate that questions often deserve as much attention as answers. Eventually, the American Medical Association funded the class, which students would fondly remember as ‘Ignorance 101.’

“Classes like hers remain rare, but in recent years scholars have made a convincing case that focusing on uncertainty can foster latent curiosity, while emphasizing clarity can convey a warped understanding of knowledge.”

Should we be offended by the subject or the idea of ignorance? Consider: “In her book, ‘Political Booms,’ Lynn T. White of Princeton University explains that ‘the Philippines has just about the longest experience of free elections in the developing world—yet this voting has not done much over many decades for the quality of governance there.’” [The future of Philippine democracy, Christopher Ryan Maboloc, inquirerdotnet, 26th Aug 2015]

Is that something we ought to seriously reflect upon? “In an opening statement, Republican Ed Royce, chairman of the Committee on Foreign Affairs, said an outdated and inefficient land administration system has resulted in fraudulent, overlapping and duplicate or triplicate land titles and widespread land grabbing in the Philippines.” ['Philippines inefficient land administration system causing fraudulent titles,’Jose Katigbak, STAR Washington bureau, The Philippine Star, 23rd Aug 2015]

“‘The perpetrators are local politicians, foreign investors and well-connected people,’ he said. Royce lauded President Aquino for his ‘considerable efforts to reform and clean up politics’ in the country, but said his few years in office cannot undo the years of damage done by deposed President Ferdinand Marcos.

“Royce said during a visit to the Philippines as part of a congressional delegation several years ago, he himself was personally prevented at gunpoint from accessing the property of a constituent by what appeared to be local security forces.

“Jonathan Stivers, an assistant administrator of the US Agency for International Development, said protecting land rights was key to promoting growth in the rural and urban areas of the Philippines. The high cost of property registration and the fact that seemingly routine registry processes like correcting clerical mistakes, issuing lost titles and weeding out fraudulent certificates require lengthy court processes, are among the constraints to secure property rights, he said.

“As an example, he said 90 percent of land cases handled by the Supreme Court in 2012 took more than 20 years to make their way through the system of hearings and appeals to higher courts.”

Is it the rule of law that we ought to figure out first? And it starts with our understanding of freedom and democracy – and the free enterprise system? This blog constantly raises our values of hierarchy over an egalitarian ethos, political patronage rather than good governance and oligarchy as opposed to a competitive economy. Because nation building is a pipe dream if we can’t commit to community and the common good.

Indeed we must figure out “the how” and our progress in fighting corruption – and our regional or AEC competitiveness. But we must foremost get a fix on “the why.” We need a deeper sense of purpose if we are to develop the capacity to think big.

Tuesday, September 1, 2015

Of peasants and serfs

When we have a cleric directing traffic and a cardinal pontificating given our traffic problem that is, as he put it, “reflective of their character as a person” – and this is the 21st century – have we in fact not moved from our modern-day “stone age” when we were peasants and serfs? [Tagle: Behavior amid traffic reflects one’s character, Yuji Vincent, 26th Aug 2015]

“In her book, ‘Political Booms,’ Lynn T. White of Princeton University explains that ‘the Philippines has just about the longest experience of free elections in the developing world—yet this voting has not done much over many decades for the quality of governance there.’” [The future of Philippine democracy, Christopher Ryan Maboloc, inquirerdotnet, 26th Aug 2015]

“White puts the blame on the system of domination in the Philippines that has fueled its brand of money politics. However, she writes that the political stasis in the country traces back to the time of American occupation in which then-Governor General William H. Taft simply perpetuated the system put in place by the country’s Spanish conquerors who instituted principalias in order to control the local population, creating the hegemonic relation between feudal lord and slave.”

“‘But will I say sorry for the thousands and thousands of kilometers that were built? Will I say sorry for the agricultural policy that brought us to self-sufficiency in rice? Will I say sorry for the power generation? Will I say sorry for the highest literacy rate in Asia? What [am I] to say sorry about?’ the senator asked.” [Bongbong ‘apologizes’ to victims of Marcos regime, inquirerdotnet, 26th Aug 2015]

“Marcos said that, in fact, the general sentiment of the people that life was better during the time of his father is one of the reasons why he is now considering to run for a higher post in 2016.”

Roxas, Quirino, Magsaysay, Garcia and Macapagal. Those were the Philippine presidents that preceded Marcos. They may not have been angels and there may have been corruption even then, but a culture of impunity it was not. And precisely why GMA must have embarrassed her father. But Marcos embarrassed the office many times over. Now we will have another Marcos? What is happening to the country, asked Vice-President Pelaez? Answer: we haven’t moved beyond the age of peasants and serfs, unfortunately!

The writer has lived in the US many years and has internalized the American mantra of “second chances.” But a Marcos will not be given a second chance like the Americans booted out Nixon. The father is not the son. But as the writer’s daughter has told her mother, “mom, it’s eerie but I am like dad and my husband is probably you.” And many times he would tell his family, “I now understand that I’m like my dad even when I purposely led my life to be different” – like my daughter did, diametrically opposed. It’s in the genes!

Why can’t we move forward? “The Millennium Challenge Corp. (MCC), a US government aid agency funding government projects in the Philippines, has identified four obstacles to the country’s attaining sustainable growth.” [US aid agency lists 4 obstacles to PH growth,Jeannette I. AndradePhilippine Daily Inquirer, 26th Aug 2015]

“According to Fatema Z. Sumar, the MCC department of compact operations regional deputy vice president for Europe, Asia-Pacific and Latin America, the MCC identified four challenges to Philippine growth based on an economic constraints analysis it conducted. These are: government implementation capacity; the high cost of transport logistics; the high cost of electricity; and land and market failures.”

In other words, we value political patronage instead of good governance and oligarchy over a competitive economy. Yet, despite our pride in “Pinoy abilidad,” we can’t problem-solve because we tolerate inefficiency, if not mediocrity, that comes when a people value hierarchy and its inherent character of paternalism and populism – expressed in “pwede na ‘yan, kawawa naman, sigue na lang.” In one word, “compassion,” as we define it. And it explains our lack of political will.

What is missing? For example, it is simple and common yet creativity is rare when it is defined as “connecting the dots” like Steve Jobs did. And dots are difficult to even identify and assemble when there is no sense of purpose like nation building that comes with the requisite values of community and the common good.

“Our traffic situation is a reflection of our character; are we giving? Are we hot-headed? Are we impatient or capable of being generous? Tagle said traits like patience, generosity and selflessness can be seen through the public’s behavior on the road.” [Gonzales, op. cit.]

“While calling on authorities to prioritize urban planning, Tagle said compassion for others will help ease, if not solve, the traffic woes that commuters and motorists suffer every day . . .”

Prioritize? But we like to hear “inclusive”? And that is why we can’t prioritize? And fall back on “me and myself” or ‘crab mentality’? It’s a mindset, a frame of mind!

“However, I must also emphasize that the transition to federalism also requires the elevation of the electorate to a higher level of political consciousness. The prevailing culture of patronage, which is the lifeblood of political dynasties, must be addressed head-on. The best way to start this task is to abandon the populist approach some sectors are wont to adopt (i.e., Bagong Sistema, Bagong Pag-asa, Federalism Philippines).” [Toxic brew: Federalism and political dynasties, Michael Henry Ll. YusingcoPhilippine Daily Inquirer, 22nd Aug 2015]

“The obvious danger is that rhetoric and sound bites, while maybe good for catching the attention of the media, can reduce the effort to a caricature and thus diminish its potency to convince the vast majority in the polity. I suggest that we proceed with a clinical and academic approach.

“The advocates of federalism, whoever they may be, must create an environment that is conducive to the integration of the polity rather than its fragmentation. Indeed, they must oversee a process that facilitates the circumspect and level-headed discussion and debate on federalism among all sectors of the community.

“Because federalism is not just a political framework, it is also a frame of mind.”

Without a sense of purpose like nation building and the requisite values of community and the common good, we will always be ruled by ‘crab mentality.’ 

We can’t keep glossing over the reality that our financial resources are coming from OFWs, not a systemic, sustainable and competitive economy. And when our economic managers talk about the imperative of raising tax revenues as a share of GDP, where like in most critical economic yardsticks we're underperforming, they ought to similarly make the overarching business case. And that is, while taxes are a mandatory, they still come from the economy’s income streams. And the JFC’s 7 industry winners are a good starting point!

Managers doggedly drive the top or revenue line while raising margins – via a commitment to investment, technology, innovation as well as people, product, supply chain and market development – so that the bottom line is healthy, sustainable and growing. In order to attain a virtuous circle, as in inclusive! Which, unfortunately, isn't how we define it? There is no free lunch!

Our economic shortcomings are beyond traditional fiscal and monetary policies like increased government spending and poverty reduction. Both are palliatives until we erect a robust economic platform – and it starts with infrastructure and a strategic industry portfolio beyond services.

It’s understandable given that we can’t prioritize vital infrastructure projects nor connect the dots? In the meantime, while the elite class are elegantly displaying their wares, we're reinforcing “the hegemonic relation between feudal lord and slave.”

Not surprisingly, “Falling farther behind,” Cielito F. Habito, No Free Lunch, Philippine Daily Inquirer, 25th Aug 2015. “Back here at home, such political will has traditionally been a rare commodity in government, but when its lack of competence also gets in the way, then we’re in real trouble.”